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SB 20
Bill Information Senate Bill 20 Title: AN ACT relating to Medicaid provider appeals and declaring and emergency. Sponsor: Sen. Ralph Alvarado Date Introduced: 6 January 2016 Final Resolution: In progress What Does It Do? In order to manage cost, utilization and quality of service, the Center for Medicaid services partners with private insurance companies who, under contract, administer health benefits and additional Medicaid services. These private health insurance companies accept a set member per month payment for these services. Approximately eighty percent of Medicaid services are administered by MCOs. In order to rake in high profits, MCOs were simply not paying providers for services rendered. Before the enactment of this legislation, providers only had the options to appeal within the MCO internally. If the appeals were denied, as they often were, the only remaining options for health care providers was to take the MCO to court. As Senator Alvarado, the sponsor of this bill said, "If you have to file a lawsuit, and if you are appealing an X-ray that pays you $15.00, it’s not worth it. Even sometimes if it’s a hospitalization, if they’re going to fight you, it’s not worth it… so oftentimes the providers just give up.” This act permits health care providers who have exhausted the internal appeals process of a Medicaid MCO to be entitled to an administrative appeals hearing. The third-party arbiter would provide for an independent review. The administrative appeals process costs and attorneys' fees are the responsibility of the party that does not prevail. Additionally it requires MCOs to send a final determination letter. What Are the Politics? Pros -Allows for greater oversight and an expanded appeals process. -Alvarado has said that 20 percent of Medicaid claims are denied, compared to the national average of around 6 percent. He suggest that bringing this bill will help bring these numbers more in line with each other and thus will encourage more providers to participate in Medicaid. -Sheila Schuster, a Louisville based mental-health advocate, voiced that the Kentucky Mental Health Coalition and the National Alliance on Mental Illness fully support SB 20 because, “they want providers to be fairly treated and to be able to provide the services that they need.” Cons -Congests CHFS with additional legal responsibilities and elongates the appeal process. -“The Governor knew that reform would probably become more expensive with the passage of this act. Insurance providers were generating their savings for Medicaid by not paying providers. That’s the bottom-line. The governor’s office was saying, ‘oh we’re saving money because it works so great.’ That was the narrative they wanted to stick with,” voiced Alvarado Major Changes During Process -Require CHFS to create administrative procedure to implement an external third party review and allow reasonable fees up to $1,000 USD. -Require the Cabinet for Health and Family Services to conduct hearings instead of the Office of the Attorney General; change the time to make a decision from 30 to 60 days; require the hearing officer to determine administrative costs to be reimbursed; increase the fee for the party not prevailing from $100 to $250; declare an EMERGENCY. Media Coverage State Journal RalphAlvarado.com Kentucky Health News Investigate Further To learn more about SB 20 and its progress through the Kentucky General Assembly, read undergraduate Mason King's semester term paper: Senate Bill 20: "A Fundamentally American Thing to Do" Go Back [[Passed|'Go Back to Passed Bills']]